Thursday, September 5, 2013

Willets Point as the “new” 42nd Street: EDC Village Has a New Idiot

The mayor keeps finding these guys, and we are hoping that
whoever takes his place will start looking for people to head economic
development who don’t appear that they just emerged from an extended stay at
Creedmoor. The latest genius is Kyle Kimball, EDC’s new leader, who managed to
mangle history by the following distortion of the historical record:

“The revitalization
of Willets Point — the industrial Queens neighborhood
that is set to undergo an extensive renovation — could help transform the
neighborhood like the project that helped reclaim 42nd Street two decades ago,
the president of the Economic Development Corporation said Tuesday.

While the finished
neighborhood will be “very different” from Times Square, the
redevelopment is being approached the same way, Kyle Kimball, the
EDC president said while speaking at a public hearing at City Hall.”

Unfortunately for the hapless Mr. Kimball, what happened at
Times Square bears no relationship to what the city is planning to do to Willets
Point-and we were there at the time, but don’t take our word, listen to what
William Stern has to say. Who’s he? Well, only the guy who was in charge of the
original eminent domain-centered plan for 42nd Street:

“By popular lore, the
revival of Times Square ranks among the most celebrated achievements of New
York City in recent years. In the 1960s, 1970s and early 1980s, Times
Square was sleazy, crime-ridden and so physically and economically blighted it
represented a threat to public safety—but today it is nearly crime free.
It is filled with tourists, and world-class corporations dwell and prosper
within its borders. It is celebrated as a triumph of “urban planning,”
“public-private partnership,” the wise use of the power of eminent domain, an
example of the intelligent intervention of government into private real estate
markets.

All of it is a myth.”

Just like what is being planned for Willets Point-the Myth
of Mike. But continue to listen to Stern set the record straight:

“In 1983, when I went
to work for Governor Mario Cuomo as chairman and chief executive of New York
State’s Urban Development Corporation (UDC), I was convinced I knew how
government planning could transform the Times Square I saw at that time to what
it is today. The truth is, however, almost none of the grandiose plans my
colleagues and I created and aggressively spearheaded ever came to
fruition. Our extravagant plans actually retarded development. The
changes in Times Square occurred despitegovernment,
not because of it. Times Square succeeded for reasons that had little to
do with our building and condemnation schemes and everything to do with
government policy that allowed the market to do its work, the way development
occurs every day nationwide. By lowering taxes, enforcing the law, and
getting out of the way instead of serving as real estate broker, the government
incentivized investment and construction and encouraged the rebirth of Times
Square to what it is today.”

So, let’s not suffer from delusions being proffered by
sleazy government bureaucrats with one eye and a leg out the door into the real
estate industry-as did the late unlamented Seth Pinsky did just this year. As
the Observer reported:

“The waning months of Mayor Bloomberg’s reign are
expected to be marked by a series of high-powered departures, as one official
after another jumps ship before the mayor leaves office. The latest is
Bloomberg stalwart and Dan Doctoroff protégée Seth Pinsky, who is stepping down
from the Economic Development Corporation to take a private sector gig with RXR
Realty, as the agency announced today.”

But what the Observer article underscores is just how much
the EDC has become a cat’s paw for big finance and big real estate:

“Mr.
Pinsky, who worked as an investment analyst and lawyer, refinancing real estate
deals for the big banks as an associate at Cleary Gottlieb before leading the
EDC…”

What Kimball is
trying to do is pull the wool over the public’s eyes so the sheer level of
unethical and criminal behavior by his quasi-public agency will remain
unobserved. The fact tha EDC was forced by the NYS AG to completely restructure
its corporate structure because of illegal lobbying was somehow unmentioned in
his testimony-and no council member had the integrity to hold EDC to account
for this.

Here’s what the
state’s Urban Development Corporation under Stern had planned for the “deuce:”

“Under my watch, the
UDC gained approval to put in place one of the largest urban renewal projects
nationwide, in the heart of midtown Manhattan no less. Mayor Koch—who
assumed office on the tail of a traumatic fiscal crisis—and Governor Cuomo
enthusiastically supported it. Although fierce, bitter rivals, both “saw
political opportunity in the ragged morality of the notorious boulevard.
Each sensed the chance to create a higher national profile for himself as the
moral savior of ‘the Deuce.’”

And so the tumultuous
collaboration began.

The 42nd Street
Development Project would have made the emperors of Rome green with envy.
Its biggest component was to be Times Square Center: four giant office
towers, containing 4.1 million square feet of floor space in all, looming over
Times Square’s southern border. Offered a $240 million tax abatement,
relatively unknown George Klein’s Park Tower Realty would develop the
site.

Upon being chosen, Klein had just completed only his third major
building in New York City, raising many eyebrows as to why this newcomer would
get this potentially (and enormously!) lucrative nod.”

Could it have been a little political insider trading?
Heaven forbid-after all, Related and Sterling Equities got the Willets bid fair
and square. Right? This couldn’t be part of a time honored NYC tradition of bid
rigging?

Stern goes on the point out his growing disillusionment with
the sleazy nature of the wielding of government condemnation power-and the self
interested role of the NY Times (go figure!):

“It was then that I
began to see the negative implications of government-directed projects like
this—the influence peddling, cronyism and corruption, especially when eminent
domain is involved. Using eminent domain for private development gives
the private sector the opportunity to wield public power—which is more or less
for sale—in order to benefit privately. One of the more prominent yet
untold players was The New York
Times, a private company that was deeply involved in this public
project. As the newspaper of record in New York, they would naturally
cover the project closely—but their involvement transcended journalistic
scrutiny.”

What surprised me most
was that nobody at the Times seemed
to care that they were compromising their journalistic integrity by assuming
the dual roles of political reporting and pure politicking when it came to 42nd Street.
Yes, the Square was named after the paper and the Times was the largest property owner in the project area,
so it is understandable they were very interested in the government’s
decisions. Yet being interested and covering the story closely is
different than assuming a decision-making role and assigning an editorial page
executive to tell government officials what to do.”

Role of Eminent Domain

Here we get to the heart of Kimball’s misrepresentation.
Yes, eminent domain was used-and abused-at 42nd Street, but it
played no role in the revitalization:

“In fact, about the
only thing the plan accomplished was something it never needed to do in the
first place—use eminent domain to take the property of private parties and give
it to other private parties for the latter’s use. From 1984 on, drawing
on the UDC’s special condemnation powers, the redevelopment project began
taking businesses in a purported attempt to cure “economic blight.”

This
condemnation binge kicked out businesses of all types and sizes. To
implement the project, the plan called for the demolition of 20 buildings and
the displacement of 400 existing businesses, only a little more than 40 of
which were adult bookstores or peep shows. In other words, although the sex businesses
represented an economic drag on the area, our goal was to remove not only these
establishments but all businesses
that did not fit into the government’s master plan.”

While eminent domain
may have made it easier two decades later to build (since the property was
already condemned), the city lost far more than what it could ever gain from
the lands’ new uses. It destroyed legitimate local businesses that create
the patchwork of unique attractions that bring tourists from across the country
to any major city. It delayed any resurgence of Times Square, as property
owners and government officials remained in limbo and tax dollars were
lost. Our efforts ignored the root causes of the problems in Times
Square, blinding us to any true cures and setting a dangerous precedent for
future projects in New York City. Property owners who were anticipating
massive buy-outs as a result of the West Side’s upzoning were shocked when they
learned this simply ushered in a plan that effectively wiped them out, with
“fair” market value in place of negotiation.

This unfair, unjust and
unconstitutional treatment led to ten years of legal challenges. What’s
worse, none of the developers we condemned property for ever realized our
collective vision.”

What a criminal farce. But here is Stern’s money quote about
how the use of eminent domain invites corruption-and his words were prescient
given the sleaziness surrounding the Willets Point development:

“When government is
given the power to take property from one private owner and give it to another,
an inevitable and very ugly political process begins. Instead of
competing in a marketplace where outcomes are determined by who has the best
innovative ideas, strong financing, creative marketing and capable management,
developers compete for political influence. In order to be anointed by
government or protect their property from being taken, they hire anyone who has
political influence or is remotely perceived to have influence: law
firms, public relations firms, lobbyists, political consultants, etc.
They attempt to cultivate the media, knowing that the media influences
politicians. The use of condemnation on 42nd Street
provided a commercial opportunity of enormous proportions for political
insiders. “

The Willets West deal is a corrupt example of corporate
welfare and crony capitalism-demonstrating in ironic fashion how the
development of the deuce mirrors that of Willets Point (although we don’t
believe that irony is Kimball’s strong suit). Stern deserves the last word:

“Looking back now at
this giant redevelopment, I am glad the area has come back and that children
can enjoy Times Squares as I did in my childhood. But we do these
children a disservice if we perpetuate the myth—the lie—that the Times Square
of today resulted from the massive government failure my colleagues, the New York Times and I foisted
upon the citizens of my city. The lesson they should learn, indeed the
lesson all of our civic leaders should learn, is that the right way for
governments to pursue economic development is to fulfill their core
responsibilities of protecting safety and freedom and allow the market to work
as it did in creating the world’s most famous square in the world’s premier
city.”

John Adams (Founding Father & 2nd President of the United States):

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and there is not a force of law and public justice to protect it, anarchy and tyranny commence. Property must be sacred or liberty cannot exist."

Jake Bono on Fox News

Private Property Rights Protection Act of 2012

The Neighborhood Retail Alliance

Queens Crap

The Bullpen Shop

Under the plan of Mayor Michael Bloomberg, The Bullpen Shop is to be demolished and its property forcibly acquired via eminent domain, to enable the Mayor's controversial $4,000,000,000.00 legacy development project.